1280. Individual Rent Adjustments for Historically Low Rents.

(A) Purpose. The purpose of this regulation is to provide prompt and fair adjustments of rents which are well below typical levels because they were significantly below market levels at the inception of rent controls.

Information included in a comprehensive study of the issue, testimony at a series of public hearings, information contained in Rent Board records, experience in other matters before the Board and materials submitted to the Board show that many units in Berkeley had rents in 1979 and 1980 which were significantly below market rents for comparable units. Where current rent levels and the ability to receive a fair return under the rent ordinance depend on rents at the outset of rent control, it is appropriate to adjust rents for units which had below-market rents at that time. The information before the Board shows that those Berkeley units which were rented at market in 1979 had rents at or above 75% of the HUD fair market rent for Alameda County; rents below that level were not at market.

Except for a limited number of units which have qualified for and received individual rent adjustments or have had an initial rent set after January 1, 1999, units which were below market in 1979 have continued to have lower rents. But for this regulation, such rent disparities would be unnecessarily perpetuated. Moreover, this regulation affects less expensive units, for which below-market rents provide especially limited net operating income, make adequate maintenance difficult and restrict the opportunity to earn a fair return. Where rents qualify for relief pursuant to this regulation, in almost every case they were below rents for comparable units at the outset of rent control and are unlikely to provide a fair return without adjustment. Providing guidelines for rent increases through this regulation allows a minimum adjustment to reduce disparities in rents for comparable units and avoids unduly delaying fair returns to landlords who own such units.

Rent increases are authorized under this regulation on the understanding that they will be imposed only subject to the hardship provisions included in Regulation 1274(C). Those hardship provisions will prevent displacement of tenants. Any potential physical changes in the environment from this regulation will be avoided.

The Board has determined lawful rent ceilings for May 31, 1980, but not for 1979. Further, May 31, 1980 rents are closely related to 1979 rents since intervening rent increases were regulated. Therefore, for purposes of this regulation rent levels for 1979 are measured by May 31, 1980 lawful rent ceilings, as adjusted.

(B) Qualifying Units; Rent Increase. Subject to the grounds for objection listed in section (D), a unit is a qualifying unit, and shall be entitled to an increase in lawful rent ceiling under this regulation, if:

(1) (a) its lawful rent ceiling as of May 31, 1980, reduced by five percent as an allowance for rent increases after December 30, 1979, or

(b) for rental units in formerly exempt triplexes and fourplexes for which the December 31, 1981 rent has been determined by the Board to be the lawful base rent, the lawful rent ceiling as of December 31, 1981, reduced by the 1981 annual general adjustment granted by the Board and by five percent as an allowance for rent increases permitted between December 30, 1979 and May 31, 1980,

was less than the amount in column II of Table I below, which amount is seventy-five percent (75%) of the Department of Housing and Urban Development fair market rents established for existing housing in Alameda County in 1979 under Section 8 of the United States Housing Act of 1937; and

(2) its current lawful rent ceiling, excluding the adjustment granted pursuant to the 1991 Inflation Adjustment Order (Regulation 1113) and the amounts of any individual rent adjustments granted on the basis of capital improvements, a property tax increase on sale under Regulation 1279, an increase in the number of tenants or an increase in space or services (an "applicable adjustment"), is less than the amount in column II adjusted upward to take into account all general adjustments granted since 1979 (without utility increases). (The calculated amounts for the current year are set forth in Appendix A);

(3) it has not had an initial rent established after January 1, 1999; and

(4) its rent ceiling has not previously been adjusted under this regulation.

Except to the extent of any valid objection under section (D), upon a petition and pursuant to this regulation, the lawful rent ceiling for any qualifying unit shall be increased by the amount of the difference between its current lawful rent ceiling (not including the 1991 Inflation Adjustment or any applicable adjustment) and the amount in Appendix A.

(C) Petitions; Notice.

(1) Owners of qualifying units may petition for individual rent adjustments pursuant to this section on a form prescribed by the Board. Neither fees nor supporting documents are required to accompany the petition when filed. The petition shall be served on tenants pursuant to Regulation 1205(B)(1).

(2) The Board shall notify each tenant of a unit subject to a petition under this section following receipt of the petition. The notice shall state that the tenant has a right to object to the petition, and that if the tenant does not object within the time allowed, or the tenant's objection does not specify one or more grounds listed in section (D), the rent for the tenant's unit may be increased by the applicable amount under subsection (B)(4), based on the information in the landlord's petition and the Board's files.

(D) Grounds for Tenant Objection. Tenants subject to petitions under section (C) may file objections with the Board within 15 working days of the date the Board gives notice that the petition has been filed. No fee shall be required to accompany tenant objections. Such objections must be made on one or more of the following grounds:

(1) The unit does not qualify under subsections (B)(1) and (B)(2). Any such objection shall state the rents which the tenant alleges were lawful as of May 31, 1980 and at the date of the petition;

(2) The unit is not eligible to receive annual general adjustments for any period since its rent was last certified or individually adjusted by the Board. Any such objection shall identify each challenged annual general adjustment;

(3) The unit does not contain, or did not contain as of December 31, 1979, the number of bedrooms on which the petition is based. Any such objection shall state the number of bedrooms which the unit currently contains and the number which it contained on December 31, 1979;

(4) The rent increase sought in the petition is subject to deferral under Regulation 1274. Any such objection under Regulation 1274(C) shall identify the basis on which the tenant qualifies for relief;

(5) The tenant has requested an inspection by the City of Berkeley on the basis that the unit is substantially deteriorated, does not currently provide adequate housing services, or fails to comply substantially with applicable state rental housing laws or local housing, building, health and safety codes.

(6) Although the tenant did not request an inspection by the City of Berkeley, the unit is substantially deteriorated, does not currently provide adequate housing services or fails to comply substantially with applicable state rental housing laws or local housing, building, health and safety codes.

(7) The unit has suffered a significant decrease in space or services since December 31, 1979, or the landlord is in material breach of the rental agreement.

(8) The unit has had an initial rent established after January 1, 1999.

(9) The rent ceiling for the unit has previously been adjusted under this regulation.

(E) Rent Increases

(1) For any unit where, after the Board gives notice of the petition, no tenant objects on a ground listed in subsection (D), and where the information on the petition substantially conforms to the records of the Board, the Board shall increase the lawful rent ceiling to the applicable amount pursuant to subsection (B)(4) for the tenant's unit.

(2) For any unit where the information on the petition does not substantially conform to the records of the Board, the Board shall allow ten (10) days to explain the discrepancy, cure the defect, or amend or withdraw the petition.

(3) For any unit as to which a tenant objects, the Board shall set the petition for an individual rent adjustment hearing and so notify the landlord and tenants pursuant to Regulation 1223.

(4) Individual rent adjustment determinations under this regulation shall be based only on the issues raised by the petition and objections pursuant to section (D). Where an objection is found to be valid in whole or in part, the rent increase authorized under this regulation shall be reduced or denied, as the hearing examiner or Board determines to be appropriate. A petition under this section shall not preclude a landlord from seeking any other rent increase to which the landlord may otherwise be entitled. Individual rent adjustment hearings pursuant to this regulation may be consolidated with hearings on other issues concerning the same units. Where a tenant objects under subsection (D)(5) or (D)(6), any increase which is otherwise due shall be made effective upon the landlord bringing the tenant's unit into compliance.

(F) Definitions for Covered Units. Unit sizes, for purposes of this regulation, shall be determined as follows:

(1) A "bedroom" shall include a room intended for sleeping which conforms to the provisions of Chapter 5 of the Uniform Housing Code, being not smaller than seventy (70) square feet in floor area with a ceiling height not less than seven (7) feet six (6) inches.

(2) A "studio" apartment means a rental unit having independent cooking facilities, a bathroom, and one main room used for living and sleeping. A "l-bedroom" apartment contains a kitchen, a bathroom, a living room, and a bedroom. A "2-bedroom" apartment contains a 1-bedroom unit plus a second bedroom. A 3-bedroom" apartment contains a 2-bedroom unit plus a third bedroom. A "4-bedroom" apartment contains a 3-bedroom unit plus a fourth or more bedrooms. Laundry rooms, utility rooms, halls, storage rooms and other rooms not intended for sleeping shall be disregarded in applying these definitions.

(3) This regulation shall not apply to single-family residences or units not included in the above definitions, such as rooms in boarding houses and residential hotels.

TABLE I

Column I

Column II

UNIT SIZE

1979 HUD RENT

MINIMUM

Studio

$217

$163

1 Bedroom

$264

$198

2 Bedroom

$310

$233

3 Bedroom

$430

$323

4 Bedroom

$470

$353

APPENDIX A

Bedrooms

1998

1999

2000

2001

2002

2003

2004

2005

2006

Studio

$360.85

$364.45

$370.45

$380.45

$393.77

$393.77

$402.68

$406.30

$409.14

1-BR

$410.78

$414.89

$420.89

$430.89

$445.97

$445.97

$455.66

$459.76

$462.98

2-BR

$458.86

$463.45

$469.45

$479.45

$496.23

$496.23

$506.67

$511.23

$514.81

3-BR

$588.68

$594.56

$600.56

$610.56

$631.93

$631.93

$644.41

$650.21

$654.76

4-BR

$632.16

$638.48

$644.48

$654.48

$677.39

$677.39

$690.55

$696.76

$701.64

Bedrooms

2007

2008

2009

Studio

$419.78

$429.02

$440.60

1-BR

$475.02

$485.47

$498.58

2-BR

$528.20

$539.82

$554.40

3-BR

$671.78

$686.56

$705.10

4-BR

$719.88

$735.72

$755.58

[Effective May 31, 1991, amended October 1, 1991, December 21, 1991, March 6, 1992, April 22, 1994, September 23, 1998 and January 9, 1999, March 13, 2000. March 23, 2001.] Appendix A updated January 9, 1999, March 13, 2000 and March 23, 2001, October 2002, January 2005, February 2007, March 2008, and January 2009.]